The World Bank has said that inflation shock is projected to push about 15 million more Nigerians into poverty between 2020 and 2022.
The Washington-based bank said this in its latest Nigeria Development Update report, titled: ‘The Continuing Urgency of Business Unusual’.
The report read in part: “Overall, the ‘inflation shock’ is estimated to result in about 15 million more Nigerians living in poverty between 2020 and 2022.”
The lending bank stressed the need for reducing the rising rate of inflation, which is pushing millions of Nigerians into poverty.
Although the World Bank says inflation in 2022 is projected to be 15.5%, Nigeria’s inflation as of May this year is 17.71%, which is higher than the World Bank’s projection.
The lending bank further said that Nigeria has one of the highest inflation rates in the world. It further disclosed that global supply shocks exacerbated inflationary pressures and increased the urgency.
According to the bank, aside from the policy distortions, the Covid-19 pandemic and the war in Ukraine have contributed to rising inflation.
It was also stated that the financing of the fiscal deficit and trade restrictions by the Central Bank of Nigeria contributes to fuelling inflationary pressures, and Nigeria will have one of the highest inflation rates in Sub-Saharan Africa in 2022.
The bank also said that poverty might be becoming entrenched in certain Nigerian households, particularly in rural areas in the North.
In combating poverty, certain reforms were recommended, which include fiscal, trade, and exchange-rate policy that could help diversify the economy; invigorating structural transformation; and creating good, productive jobs, especially wage jobs.
President Muhammadu Buhari had in June 2021 inaugurated the National Steering Committee of the National Poverty Reduction with Growth Strategy, chaired by Vice President Yemi Osinbajo. This, he said, re-echoes his commitment to lifting 100 million Nigerians out of poverty in 10 years, with a well-researched framework for implementation and funding.
Despite this, the rate of poverty in the country seems to be on the rise, driven significantly by inflation.
The International Monetary Fund (IMF) had also projected that the rate of inflation in Nigeria is expected to remain elevated in 2022.
